UK investors’ willingness to sacrifice returns for real world impact appears to be on the wane.
American Century Investments spoke to around 1,000 investors in each of the UK, US, Germany, Australia and Singapore to gauge sentiment on the topic.
The UK focused researchers found a decline in those saying they would sacrifice returns to create a positive impact to 33%, down from 38% the previous year.
The UK was followed by Germany (31%), and Australia (29%), with the US and Singapore showing the most willingness to sacrifice returns at 40% and 47% respectively. The US was the only market to show an increase.
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Behind the headline numbers, the story was more complex. The UK had the second highest rate of participants willing to sacrifice up to 10% of their returns in order to create a positive impact at 74%, following Germany at 76%, and followed by Australia (71%), the US (60%) and Singapore (58%).
Sarah Bratton Hughes, senior vice president and head of sustainable investing at American Century Investments, said: “Although interest in impact investing is still higher than in earlier years of our research, the results suggest that there is room for improvement in the way the asset management industry communicates what investors should, and should not, expect from impact investing.
“Participants do want some of their investments to have a positive impact, but they are not naïve, or overly idealistic – they are not keen on sacrificing return,” she added. “Investors typically allocate only a proportion of their portfolio to impact funds – in other words, impact investing is not an all or nothing proposition.”
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